Strong demand to keep milk product prices high

by Ron Sterk
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WASHINGTON — Growth in commercial use of all milk products will continue to exceed production growth in 2007 and keep prices high, the U.S. Department of Agriculture said in its June 19 Livestock, Dairy and Poultry Outlook report (click here to read report).

"Continued strong demand for dairy products, especially dry products, is having an impact throughout the dairy complex," the U.S.D.A. said.

Tight global dry milk product supplies are expected to keep domestic prices for nonfat dry milk high through 2007, the U.S.D.A. said. Low stocks in Europe were being diverted to cheese, and drought-reduced supplies in Australia are not expected to recover this year, the Department said.

Although some easing in tight dairy product supplies could come toward the end of 2008, prices will remain high by historical standards, the U.S.D.A. predicted. The number of dairy cows is expected to hold about steady this year, but dairy farmers are expected to increase herd sizes slightly in 2008 in response to strong milk prices and some easing in feed prices, the U.S.D.A. said.

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